Desirable Difficulties?

I just saw Malcolm Gladwell on The Daily Show. Apparently his book David and Goliath is about how it can actually be an advantage to have some kind of disadvantage. He mentioned that a lot of really successful people are dyslexic for example.

But its either an absurdity or just a redefinition of terms to say that disadvantages can be advantageous. The evidence appears to be a case of sample selection bias. Here’s a simple model. Everyone chooses between two activities/technologies. There is a safe technology, think of it as wage labor, that pays a certain return to everybody except those the disadvantaged. The disadvantaged would earn a significantly lower return from the safe technology because of their disadvantage

Then there is another technology which is highly risky. Think of it as entrepreneurship. There is free entry but only a randomly selected tiny fraction of entrants succeed and earn returns exceeding the safe technology. Everyone else fails and earns nothing. Free entry means that the expected return (or utility thereof) must be lower than the safe technology else all the advantaged would abandon the latter.

The disadvantaged take risks because of their disadvantage and a small fraction of them succeed. All of the highly successful people have “advantageous” disadvantages.

7 comments

1. I see we both what later Jon on the web :)
2. This Gladwell book seems a redux of “Born to Rebel”, a great read from 2004 :( That book asserted that later borns (like me!) take more chances (“the road not taken”) to stand out, and thus typically are the revolutionaries that make the world a better place http://abcnews.go.com/2020/story?id=124276
3. Did you know that Gladwell was a Canadian, a graduate of University of Toronto, who won the 1,500 meter title at the 1978 Ontario High School 14-year-old championships. Just sayin’. Damn those Canadians! :)

this idea is also related to the paradox of power by hirshleifer. if there are two activities, production and rent seeking, and two individuals who are both equally good in rent seeking, the more productive one will end up with less in the end. in that sense it is an “advantage to be disadvantaged”

The theory is incomplete. Any theory of “advantageous difficulties” based on selection only will have as a result that non-disadvantaged agents are weakly better off ex-ante.
Now, if you also include effort, the story is more convincing. Non-disadvantaged agents are weakly better off ex-ante, if we take into account effort. The disadvantaged agents will put more effort in whatever they do (namely, the risky choice).
If we only observe (or measure) performance, then we conclude that disadvantaged agents perform strictly better.

Notice that this story also work as an “unintended consequences” story:
disadvantage kids put more effort in whatever they do, just to partially compensate (but may still under-perform as kids). However, this effort develops some skill (perseverance, endurance, etc) that make them over-perform as adults, even if they do not put more effort as adults…

[…] is a sociologist and self-proclaimed underdog, who believes the immense potential of these “desirable difficulties” is especially salient in the workplace. Here’s why she believes we should all seek […]